September 2009
Document J66
Dr Pepper Snapple Group deployed Salesforce.com to replace an aging contact management system and custom spreadsheets, dramatically increasing management and sales productivity and providing greater visibility for strategic decision making.
ROI: 56%
Payback: 2.3 years
Average annual benefit: $327,632
Dr Pepper Snapple Group is a leading producer of flavored beverages in North
America and the Caribbean. The company manufactures, markets, and distributes more than 50 brands of carbonated soft drinks, juices, ready-to-drink teas, mixers, and other premium beverages across the United States, Canada, Mexico, and the
Caribbean. Based in Plano, Texas, the group’s brands include Dr Pepper, Snapple,
Sunkist, 7UP, A&W, Canada Dry, Crush, Mott’s Squirt, Hawaiian Punch, Penafiel,
Clamato, Schweppes, Venom Energy, Rose’s, and Mr. And Mrs. T mixers.
As the group’s business continued to grow, it found that its initial CRM application purchased in the early 1990s was no longer being supported by the vendor and, in fact, was used by only a small group of people. Instead, most groups had built complex spreadsheets to track and forecast their business. On a monthly basis, the spreadsheets would be consolidated so managers could have a view of sales activity and pipeline forecasts. In 2005, the company decided to explore new CRM options that would enable them to have less manual consolidation and greater ongoing visibility into actual sales activities on an ongoing basis.
Dr Pepper Snapple Group considered a number of vendors including SAP and
Salesforce.com and ultimately selected Salesforce.com for three main reasons:
Salesforce.com was more cost effective on both an initial and ongoing basis
Salesforce.com could deliver upgrades and enhancements without disrupting users
A successful pilot showed Salesforce.com could support the company’s sales tracking and reporting needs.
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TOPICS
Customer Relationship
Management
Software as a Service
September 2009 Document J66
In April 2006, the company started its implementation, training users in a 2-day training course in May and June and running Salesforce.com side-by-side with its other system in July to ensure there wouldn’t be any data migration issues or discrepancies. By August 1, the group was using only Salesforce.com for all its sales forecasting and reporting activities.
Moving to Salesforce.com has enabled Dr Pepper Snapple Group to streamline its data entry and sales forecasting and reporting operations, enabling both greater visibility and greater productivity. Key benefits from the solution include:
Increased manager productivity. Managers save a day a week because sales information is available to them at their fingertips when they need to make decisions.
Reduced report consolidation time. One employee who used to spend 10 days per month compiling sales information for management has now been redeployed to other activities.
Reduced report consolidation time. Individual sales people can now keep all their sales information in one place, reducing the amount required for them to submit their sales forecasts each month.
Faster budgeting and forecasting. Ready access to information enables managers to make faster budgeting and forecasting decisions and instead focus on leveraging the data to identify new strategic sales growth opportunities.
Greater visibility. Now sales professionals and managers can rapidly access real-time information about sales performance by account, sector, and product, and rapidly identify opportunities for improvement.
BENEFITS
Direct
21%
Indirect
79%
TOTAL: $982,897
Key cost areas for the project included software, personnel, consulting, and training. The company also made some investment in travel to provide users with in-person group training.
© 2009 Nucleus Research, Inc. Reproduction in whole or part without written permission is prohibited.
Nucleus Research is the leading provider of bottom line-focused technology research and advice. www.NucleusResearch.com
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September 2009 Document J66
COSTS
Training
2%
Personnel
35%
Consulting
4%
Software
59%
TOTAL: $759,264
To ensure user adoption, Dr Pepper Snapple Group trained all users in person in a
2-day training session. It recognized that different users had a different level of technology experience so some needed additional attention during the early phases. It also started with just accounts and contact coverage and is now enhancing the application with more detailed fields and information now that users have learned the basics.
Nucleus quantified the initial and ongoing costs of software, consulting, personnel, training, and other related costs over a 3-year period to quantify the total cost of
Dr Pepper Snapple Group’s investment in Salesforce.com.
Direct benefits quantified included the elimination of support and upgrade costs for the company’s previous CRM application. Indirect benefits quantified included productivity savings for managers, sales support people, and sales professionals and were quantified based on the average annual fully loaded cost of employees using a correction factor to account for the inefficient transfer of time between time saved and additional time worked.
Nucleus Research is a global provider of investigative technology research and advisory services. Building on its unique ROI case study approach, for nearly a decade Nucleus Research has delivered insight and analysis on the true value of technology and strategies for maximizing current investments and exploiting new technology opportunities. For more information or a list of services, visit NucleusResearch.com, call
+1-617-720-2000, or e-mail info@NucleusResearch.com.
© 2009 Nucleus Research, Inc. Reproduction in whole or part without written permission is prohibited.
Nucleus Research is the leading provider of bottom line-focused technology research and advice. www.NucleusResearch.com
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Project:
Annual return on investment (ROI)
Payback period (years)
Average annual benefit
Average annual total cost of ownership
Salesforce.com
56%
2.28
327,632
253,088
Direct
Indirect
Total Benefits Per Period
Pre-start
0
0
0
Year 1
68,640
258,184
326,824
Software
Hardware
Total Per Period
Software
Hardware
Total Per Period
Pre-start
0
0
0
Pre-start
0
0
0
Software
Hardware
Consulting
Personnel
Training
Other
Total Per Period
Pre-start
127,500
0
27,400
158,000
6,764
2,500
322,164
Net cash flow before taxes
Net cash flow after taxes
Annual ROI - direct and indirect benefits
Annual ROI - direct benefits only
Net present value (NPV)
Payback (years)
Average annual cost of ownership
3-year IRR
FINANCIAL ASSUMPTIONS
All government taxes
Discount rate
Pre-start
(322,164)
(161,082)
(161,082)
322,164
27%
50%
15%
Year 1
137,324
68,662
43%
-38%
(101,376)
511,664
Year 1
0
0
0
Year 1
0
0
0
Year 1
127,500
57,000
5,000
0
0
0
189,500
Year 3
68,640
259,692
328,332
Year 3
0
0
0
Year 3
0
0
0
Year 3
0
18,000
0
0
0
0
18,000
Year 3
310,332
155,166
56%
-24%
37,752
2.28
253,088
27%
Year 2
68,640
259,101
327,741
Year 2
0
0
0
Year 2
0
0
0
Year 2
194,100
30,500
5,000
0
0
0
229,600
Year 2
98,141
49,070
37%
-44%
(64,272)
370,632
© 2009 Nucleus Research, Inc. Reproduction in whole or part without written permission is prohibited. All calculations are based on Nucleus
Research's independent analysis of the expected costs and benefits associated with the solution. www.NucleusResearch.com
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